Select Committee on Treasury Minutes of Evidence

Examination of Witnesses (Questions 60-79)


30 NOVEMBER 2005

  Q60  Jim Cousins: Have you had any approaches from anyone to maybe extend the child trust fund brand to own products that are not actually part of the Government's own child trust fund system?

  Mr Lewis: Would one example of that be older children who are not eligible for this?

  Q61  Jim Cousins: Yes.

  Mr Lewis: There is a case for looking at whether the product should be designed for older children where the state does not necessarily have to contribute, but the principle would be that we would want to design a suitable product. There is a case being made. That case is still being made but at this stage we are not doing that. There is a case for it but we are not doing it, but what we have seen is that the market has begun to respond to the child trust fund by beginning to develop new products for older children. In a sense, that is very good news because we would have hoped that would have been one of the consequences, that it would have got providers to think in a different way about the opportunities relating to children, so we are already seeing market movement in that respect.

  Q62  Jim Cousins: Could you just quantify that a bit. Is this something that is simply developing naturally or are you tracking it?

  Mr Lewis: We are not tracking it because all the time there has been a lot of pressure and a lot of views that we ought to look at products for older children, and therefore in a sense we are constantly re-examining whether that would be the right thing to do. One of the reasons we have decided at this stage not to do it is because the market is moving in the right direction. That position is always subject to review because we are at very, very early stages.

  Q63  Jim Cousins: Because if this is to make a significant contribution to asset-based welfare then clearly it has got to grow beyond its existing format and limits?

  Mr Lewis: Absolutely.

  Q64  Jim Cousins: This scheme is the beginning?

  Mr Lewis: Yes.

  Q65  Jim Cousins: And you are open to those suggestions from the market?

  Mr Lewis: Absolutely.

  Q66  Jim Cousins: And you would not necessarily take the view that the child trust fund was a Government brand which could not be extended to other products?

  Mr Lewis: No, I would not have said that.

  Q67  Jim Cousins: How did the IT stuff work out? It has been referred to by Mr Wells. We are always interested in government IT systems here.

  Mr Lewis: We have not had many glitches?

  Mr Wells: No, we are pleased to see some of the providers in industry and commentators who have submitted evidence to you comment that on this one occasion the relationship with HMRC and IT has gone well, and indeed we have issued over two million vouchers this year without serious hitches, so we are pleased with the way in which it has developed, yes.

  Q68  Jim Cousins: Thank you. Is there any evidence of the cashed vouchers and non-cashed vouchers being evenly spread across the country or are there particular regions or countries where the proportion of non-cashed vouchers is greater? Have you done any tracking?

  Mr Lewis: When you say that, do you mean accounts, stakeholder vis-a"-vis cash, or conversion from vouchers to accounts?

  Q69  Jim Cousins: Exactly, yes.

  Mr Lewis: I have not got that information at the moment. Will we have geographical breakdown in due course?

  Mr Wells: We do not have a geographical breakdown at the present time.

  Mr Lewis: That is not built in?

  Mr Wells: That is not part of the design at the present time, no.

  Q70  Jim Cousins: So it is impossible to produce take-up information by region or country?

  Mr Lewis: Or postcode, you do not have that?

  Mr Wells: We do not have that.

  Mr Lewis: We will write to you on that because I think it is a very important point.[5]

  Q71 Ms Keeble: Could I just ask one question on this, it is about delivery and take-up. Have you given any thought to the fact that some of the most vulnerable families actually move house quite often either because they are in temporary accommodation or bed and breakfast or simply because due to the nature of their circumstances they are very mobile.

  Mr Lewis: People move house.

  Mr Mudie: They do not have a house.

  Q72  Ms Keeble: People in bed and breakfast or in temporary accommodation or if you look at some of most vulnerable housing estates there is a 25% turnover of tenancies for a whole variety of reasons.

  Mr Lewis: I think we do take account of that as much as we can. I have asked that question relatively recently internally.

  Q73  Ms Keeble: What was the answer internally?

  Mr Lewis: We do everything we can.

  Mr Wells: One of the things we try to do is work it out using the data from the child benefit system. We have the record of where we are making the child benefit payment to, and in terms of new children being born at the moment, if you like, then the interregnum between child benefit being claimed and the child trust fund voucher being issued is very small, so we hope that the prospect of people moving in that short time window is relatively small, but obviously there are always going to be a few cases.

  Q74  Jim Cousins: Other colleagues have referred to the fact that this might be seen as a middle-class initiative. Let me be absolutely frank, I have no particular political mission to be nasty to the middle classes, I put that on the table.

  Mr Lewis: You have just disappointed some of your colleagues.

  Q75  Jim Cousins: Disappointing colleagues, of course, is an occupational hazard for everyone in this place! My recollection is that in the past there were little penny products that people who were not middle class used to invest into and men in shiny brown boots used to come down the terrace and collect the money, not that I particularly want to be thought of as somebody who has got a thing about men with shiny brown boots either, but in this respect those products had one particular attribute which the child trust fund does not have, in that they were ten-year products quite commonly, they were not permanently locked in in the same way that the child trust fund is. There were some assurances given at one stage that this was an issue the Government would be looking at. Is this something that you are coming back to see if there are circumstance where the child trust fund could be unlocked?

  Mr Lewis: Before 18?

  Q76  Jim Cousins: Yes?

  Mr Lewis: None at the moment.

  Q77  Jim Cousins: Not at all? Not under any circumstances?

  Mr Lewis: Not at the moment.

  Q78  Mr Mudie: In the original documentation there was reference to tokens. Can you tell me what has happened to that?

  Mr Lewis: I am sorry?

  Q79  Mr Mudie: Did you not catch the question?

  Mr Lewis: I did not. I have just been corrected on a previous answer because you would want to know I suppose, to be sensitive we should mention this, there is one exception and that is terminally ill children, where we do look at unlocking it.

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